G1 Therapeutics, Inc.

Today, and thank you for standing by, welcome to the G1 Therapeutics fourth quarter 2023 financial results conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Will Roberts, Corporate Communications. Please go ahead.

Thank you, Rivka. Good morning, everyone, and welcome to the G1 conference call to discuss our fourth quarter and full year 2023 financial results and business update. The press release on these financial results was issued this morning and can be found in the news section of our corporate website, g1periodics.com. On this morning's call, the team will provide a business overview of this 2023 fourth quarter and full year, including an update on our clinical programs and our commercial progress in that period with COSELLA, which is approved and commercially available to decrease the incidence of chemotherapy-induced myelosuppression in adult patients when administered prior to a platinum or topazide-containing regimen or topazecan-containing regimen for extensive-state small-cell lung cancer. As Rivka mentioned, a Q&A session will follow the prepared remarks. Before we begin, I want to remind you that today's webcast contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements represent management's judgment as of today and may involve risk and uncertainty that could cause actual results to differ materially from those expressed in or implied by these statements. For more information on such risk and uncertainties, please refer to our filings with the Securities and Exchange Commission, which are available from the SEC or on our corporate website. Any forward-looking statements represent our views as of today, February 28, 2024. Joining me on the call today are Jack Bailey, our Chief Executive Officer, Andrew Perry, our Chief Commercial Officer, Raj Malek, our Chief Medical Officer, and John Umstead, our Chief Financial Officer. With that, I'll turn the call over to Jack.

Thanks, Will. Good morning, everyone, and thank you for joining us on the call today. From a commercial perspective, as you'll hear from John and Andrew, we experienced strong Cosella growth in the fourth quarter of 2023, including revenue and volume growth of 29% and 19% respectively. Thanks to this progress, and that which we expect in 2024, we have provided full year 2024 net product sales guidance of between 60 and 70 million. That said, as we discuss the milestones we have achieved during the fourth quarter, it's essential we continue to look forward to and prepare for the opportunities ahead. Namely, that of category leadership in triple negative breast cancer if we are successful in our clinical programs. First, as you'll hear from Raj, the final results from our ongoing phase three, preserve two trial of trilocycline in the metastatic setting are expected in the third quarter of this year. Given our statistical boundaries, if our trial is successful in generating results similar to that of our phase two trial, they would be among the most important data generated in the first line metastatic setting in both PD-L1 positive and negative tumors to date. Beyond that, the use of antibody drug conjugates or ADCs is appropriately becoming commonplace in the second line and later TMDC treatment settings in addition to other tumor types. We have shown promising benefits thus far in our ongoing Phase II trial when trilocyclic is combined with a trope II ADC, including improvements in tolerability and, more recently, in initial overall survival. We expect updated results from that trial mid-year. With these and other recent results, we believe that continued clinical success in these trials could position G1 for category leadership across the spectrum of TMBC, in addition to our work in extensive stage small cell lung cancer. On today's call, Andrew will cover our recent commercial results. Raj will provide an update on our clinical pipeline, including our progress toward final results with our phase three Preserve2 trial. John will then discuss the financial results for the quarter, as well as our 2024 guidance. Finally, I'll be back with some concluding comments. With that, I'll turn the call over to Andrew.

Thank you, Jack. I'm glad to be with you today to provide an update on our fourth quarter 2023 sales performance and the significant progress we've made in our commercial execution over recent months, having navigated a period of slower growth during the national platinum chemotherapy shortage last year. Our goal in Q4 was to restore the momentum we had built early in the year, which had been interrupted by supply disruptions of carboplatin and cisplatin during Q2 and Q3. We were able to achieve this goal and to continue to demonstrate a broader platform of deeply adopting customer organizations. Beginning with sales results, we ended the quarter with 19% overall vial volume growth compared with Q3 2023. All three of our sales regions generated double-digit volume growth in the fourth quarter. Focusing on the top 100 customer organizations, which represent around half the volume opportunity in the market, our growth was higher at 24% in the segment, and we added two new top 100 customers during Q4, meaning 75 of the top 100 have ordered Cosella launch today. The quarter our efforts to grow in top 100s were supported by our new strategic accounts team, who are equipped with our latest real-world evidence data and are focused on creating systematic growth in our largest customers. And as a result, top 100 customers composed 58% of our total volume in the quarter. Community clinics and hospitals grew over 20% during Q4 and represented just over 80% of sales, with the remainder being in academic centers. Our fastest growing segment during the quarter was in customers covered by volume-based contract agreements. Contracted customers grew 28% during the quarter and made up around a third of our overall volume. We continue to see a broader base of adoption with 55 new accounts and almost 30 customers ordering 100 or more vials in Q4. Our estimate of Cosella patient share continues to grow, and although claims data for Q4 are not fully available, We estimate patient share of over 13% in the first line market, demonstrating that there remains significant opportunity for growth. 97% of our volume in the quarter was in commercial supply, with 3% provided through our patient assistance program. Our payer mix remains stable, with the majority covered by Medicare, and third party payer reimbursement has remained strong. Moving into Q1 2024, We have embedded our new strategic accounts capabilities, we continue to pursue new contract customer opportunities, and we've already seen our highest month ever for both volume and ex-factory sales in January, giving us confidence of continued growth going forward. I'll now pass the call over to Raj.

Thanks, Andrew, and good morning, everyone. I'll start with a reminder of recent progress that our Phase 3 Preserved Food Trial in Metastatic Triple Negative Breast Cancer. Earlier this month, we announced that the independent data monitoring committee for the trial reviewed data from the interim analysis of overall survival and recommended that the trial continue to the final analysis. It should be conducted on the intent to treat or ITT population. Importantly, the DMC did not express any concerns with the trial. And as a reminder, G1 remains blinded to all data. we continue to be confident in the ability of TrialCyclib to achieve a positive outcome for a variety of reasons. First, there is a greater likelihood of achieving a positive outcome at a final analysis than at an interim because there are a larger number of events and a higher alpha allocation at the final analysis. This results in the ability to detect a larger critical hazard ratio at the final analysis compared to the interim. We discussed on the last call that the critical hazard ratio was 0.61 at the interim. In the final analysis, we'll be able to pick up a larger hazard ratio of 0.67. And of course, second, the strength of the data that precedes this trial provides additional confidence. We frequently describe the phase two trial in which we saw statistically significant improvements in median overall survival in patients receiving Trialocyclib prior to gemcitabine carboplatin compared to those receiving chemotherapy alone. Importantly, the Kaplan-Meier survival curves of trial participants receiving Trialocyclib plus gemcitabine carboplatin continued to separate over time compared to participants receiving placebo prior to their chemotherapy, particularly for patients with PD-L1 negative tumors. The curve separation didn't occur until approximately 15 months. This is particularly relevant as the enrollment period for Preserve 2 was from June 2021 until October 2022. And the interim analysis in February 2024 was conducted approximately 15 months after the last patient was enrolled. Therefore, the additional months of follow-up between the interim and final analyses could be important for the curves to continue to meaningfully separate. Equally compelling were the results that we presented in December last year at the San Antonio Breast Cancer Symposium regarding subsequent anti-cancer therapy use among patients that participated in the Phase II TMBC trial. Participants who received Trelacycline with gemcitabine carboplatin and then received subsequent anti-cancer therapy after Trelacycline discontinuation exhibited clinically meaningful improvements in overall survival. with medians of 32.7 months versus 12.8 months. These results were statistically significant with a p-value of 0.001. Further, median overall survival for patients who received trilocyclic was 14 months from the time they started their first subsequent therapy, compared to 5.8 months for patients who did not receive prior trilocyclic. The p-value for this analysis was also 0.001. These results show that Trialocyclib can provide benefits during the administration with chemotherapy in the short term and additional benefits after Trialocyclib discontinuation by improving long-term immune surveillance. Given that Pembrolizumab achieved a hazard ratio of 0.89 in the ITT population in the Keynote 355 trial, achieving our boundary hazard ratio of 0.67 would mark the biggest improvement in overall survival seen in first-line metastatic triple-negative breast cancer to date. We look forward to the final results, which are estimated to be in the third quarter of this year. Regarding our Phase II trial of Falacycline in combination with the TROP2-ADC-sacituzumab-Govatecan, in January, we described promising initial efficacy results including meaningful improvements in median overall survival among patients receiving Trilocyclib compared to historical results for the ADC alone. We expect to provide updated overall survival results mid-year. Assuming the updated results remain strong, we anticipate continued partnership interest in developing Trilocyclib with TROP2 ADCs that are in various stages of clinical development in TMBC and beyond. Additional clinical trials are ongoing along with tracking real-world data to evaluate whether trilocyclic may also improve survival in extensive-state small-cell lung cancer. A potential overall survival benefit, if demonstrated, would supplement the already known trilocyclic benefits of myeloprotection and reductions in hospitalizations and associated costs. These ongoing survival studies and analyses in small-cell lung cancer include post-marketing study of Trolocyclic Pyrotetopetecan in approximately 300 patients, the real-world evidence we continue to generate, the most recent cut of which was presented in October at the ASCO Quality Care Symposium, and a Phase II investigator-initiated trial at UNC-Leinberger in combination with Lurbanectadine, which, according to the study investigator, continues to look promising from the perspective of both model protection and tumor responses. However, our new term clinical focus for the next six months remain on advancing the science in triple negative breast cancer as we deliver the TMBC ADC phase two results mid-year and the phase three final results in the third quarter. With that, I'll turn the call over to John for the financial results.

Thanks, Raj, and good morning, everyone. As Will mentioned, full financial results for the fourth quarter and full year 2023 are available in this morning's press release and will be in the 10K, which we expect to follow at the market close. Net sales of Casella grew 29% in the fourth quarter of 2023 to $13.9 million compared to 19% quarterly vol volume growth. This disparity is largely related to the timing of the sales. As mentioned on our November call, we recognize revenue upon delivery to distributors. We experienced an increase in patient-involved demand towards the end of the third quarter of 2023, which was recognized as revenue in the fourth quarter, in addition to that which we recognized due to strong quarter-over-quarter growth. Our total revenue for the fourth quarter of 2023 grew 45% over the fourth quarter of 2022 to $14.9 million, comprised of the $13.9 million I just described in net Casella revenue and $1 million in license revenue. This compares favorably to the $10.3 million in total revenue, including $8.9 million in product revenue in the fourth quarter of 2022. Total revenues for the full year 2023 were $82.5 million, including net revenue of $46.3 million and license revenue of $36.2 million. For the full year 2022, total revenues were $51.3 million, including net product revenue of $31.3 million. Cost of goods sold for the fourth quarter of 2023 was $1.3 million, compared to $1 million for the same period in 2022. Cost of goods sold for the full year 2023 was $7.2 million, compared to $3.7 million for the prior year. As we guided in November, our operating expenses of $122 million in 2023 were 35% lower than the $187.5 million in OpEx in 2022. Research and development expenses for the fourth quarter of 2023 were $7.4 million compared to $16.6 million for the same period in 2022. The decrease was primarily due to lower clinical program costs. R&D expenses for the full year 2023 were $43.7 million compared to $83.3 million for 2022. Our selling, general, and administrative expenses for the fourth quarter of 2023 were $15.2 million compared to $23.6 million for the fourth quarter of 2022. The decrease in SG&A expenses was primarily due to decreases in personnel costs and medical affairs and further optimization of our commercialization activities. SG&A expenses for the full year 2023 were $71.1 million compared to $100.4 million for the prior year. Regarding our cash position, we ended the fourth quarter with cash, cash equivalents, and marketable securities of $82.2 million compared to $145.1 million as of December 31st, 2022. Finally, regarding revenue and cash runway guidance for the full year 2024. As Jack mentioned, we expect net to seller revenue to be between $60 million and $70 million for 2024. There is no change to our 2024 gross to net expense percentage estimates. We expect the 2024 year in cash, cash equivalents, and marketable securities balance of between $50 to $60 million. Additionally, we will continue to look for ways to optimize our cost structure in the near term with targeted headcount reductions outside of the commercial organization. and identifying other potential efficiency improvements where appropriate. And based on the foregoing, we expect that our cash runway will take us into 2025. With that, I'll turn the call back over to Jack for some closing comments. Jack?

Thank you, John, Raj, Andrew, and Will. I also want to recognize the cancer community. We are thankful for the opportunity to be part of your journey. We are encouraged by the feedback we receive daily from physicians who rely on CoSELLA to reduce the chemotherapy-related myelosuppressive side effects in their patients with extensive stage small cell lung cancer and by the demand trajectory in Q4 2023 and the beginning of Q1 2024. And while we have a strong commercial team driving CoSELLA penetration and demand and a clear path to profitability in this first indication, Our focus is also on generating the clinical results required for TMBC category leadership. To that end, as you've heard today, we have important updated survival results from our phase two study in combination with the TROP2 ADC expected midyear and final results from our ongoing phase three trial in first line metastatic triple negative cancer expected in the third quarter of 2024. Thank you for your time this morning. We will speak again in this format on the first quarter 2024 call in May and see many of you at the spring investor meetings. With that, I'll turn it over to Q&A. Operator, would you please remind our listeners how to ask a question?

Thank you. At this time, as we mentioned, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your questions, please press star 1-1 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Joseph Sohm of TD Calendars. Your line is now open.

Joseph Sohm, Hi there. Good morning. Thank you for taking my question. Maybe just overall, I mean, Initially, the frontline TMBC data were, you know, delayed from sort of your very initial expectations, which I guess kind of suggests that the event rate is maybe occurring a little bit slower than initially anticipated, and hopefully some of that is due to the addition of Casella. But when you think about the comparator arm, I guess, is there anything over the past several years in particular that would have, you know, extended overall survival for the comparator and what is sort of a good comparator for what that arm should do. Is 355 the best? Obviously, we saw your phase two data, but that includes a few patients in later lines. And then second, on the commercial side, that 13% penetration in frontline seems really strong. I guess, how high do you think penetration can go in the frontline And are these the same, are these accounts that have the most experience with Casella? Do they start later on and then go forward, or kind of who's using it in the front line? Thank you.

Thanks, Joe. While we have Raj take the first one, and then we'll have Andrew answer the second. Raj?

Yeah, hey, Joe. Yeah, I mean, in terms of comparator, you know, we still think that the Keynote 355 Gemcarbo arm is a reasonable one, because there aren't really any other data beyond that. I mean, it's the most contemporary data we have. I mean, in terms of things that could potentially be confounding, the one change, of course, even since then is there's likely greater ADC use, particularly in later lines of therapy. But in a blinded trial, we would expect that that would be, you know, relatively balanced between the two arms. And so, you know, we would expect that trial based on the prior data in terms of benefiting patients even with subsequent therapies will continue to show benefit when added to or rather when ADC is given after trial.

Andrew? Yeah, thanks, Phil. So, yeah, thank you. The 13% in first-line, so obviously over 90% of our use is in that first-line setting. And we're talking about an overall market here accessible to Cosella, which we estimate that over $700 million in potential gross revenue, so a very, very significant market opportunity for us. We've seen that market share go up very consistently, even through that platinum shortage. Our market share continues to grow. There were just fewer patients taking eligible chemotherapies, which makes sense. So we're very ambitious for what we can continue to add in that market share going forward. And frankly, I won't be satisfied until every eligible patient has got Clostella.

Perfect. Thank you very much.

One moment for our next question. Our next question comes from the line of Gil Blum of Needham Company. Your line is now open.

Good morning, and thanks for taking our question. Just a clarifying question. Did the IDMC look at the interim data? Did the committee have a remit to discontinue the study for futility?

Yeah, hey, Gil. So the interim analysis was an efficacy one only. You know, obviously, if they saw the data, they could, of course, do additional analyses at their discretion. But the only analysis that was sort of pre-specified was one for efficacy.

Okay. And maybe looking towards mid-24 for the ADC results, just kind of set our expectations of what we could potentially see there. Thank you.

Yeah, so, you know, obviously what we're interested in seeing is, you know, we presented the early cut at the JPM, and so we'll be looking to see, you know, how the data, sorry, continue to track versus that. And, you know, if you recall, at 12 months, we had about a 20% improvement. Clearly, the rest of the curve could change, but we're looking to see to see how much improved the survival is relative to historical data, and then make decisions on further development likely in a partnership scenario.

One moment for our next question. Our next question comes from the line of Anupam Rama of JP Morgan. Your line is now open.

Hi, guys. This is Priyanka on for Anupam. We just have a quick question. How much of the incremental headwind via the platinum shortage is assumed in the 2024 guidance for Casella? Thank you.

So, Priyanka, can you repeat the question, please?

Yeah, sure. So, how much of the incremental headwind via the platinum shortage is assumed in the 2024 guidance for Casella?

Yeah, we don't assume if you're inflating any Terry Ford, we don't assume any given the limited duration therapy of these patients along with unfortunately the the diagnosis to expiration that you tend to see with this very aggressive cancer. We don't see that any of this sort of pushes patients into 2024. What we are doing is certainly monitoring the FDA website to make sure that it doesn't, we don't see a repeat in 24 of what we saw in 23. And certainly at the clinic level, what we've heard from really late Q3 is that customers are not having issue being able to access any of the CARBO or cisplatinum.

Understood. Thank you so much.

One moment for our next question. Our next question comes from the line of Laura Prendergast of Raymond James. Your line is now open.

Hey, guys. Thanks for taking the questions. I was wondering if you could elaborate a bit on, you know, if you do see mid-year, this ADC combo data, you know, still continuing to look strong, the timing of when you expect to initiate a randomized trial. And then, additionally, on your cash runway, does that include baked-in launch costs for preserve two if the final analysis is successful, and the phase three for the ADC combination? Thanks.

So, I'll have John pick the last one, and then we can flip over to Raj.

Yeah.

Sorry.

Go ahead. For the cash runway part, you know, for my TMDC launch costs, we do have those inclusive of it. Obviously, with the delay to interim, those costs get pushed out. But we do have them baked in in our runway. You mentioned, I believe, an ADC phase three randomized trial. We do not have that in there. I think, as Roz mentioned, we want to see our mid-year results and then hopefully have the ability to partner with some type of collaboration potentially where we would look at a phase three trial.

Great. Thank you. Yeah, I mean, that's... Go ahead, Roz.

No, I was going to just... I think John covered it, unless you have an additional question.

I know that's all for me.

Thank you.

Thank you, Laura.

As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. One moment for our next question. Our next question comes from the line of Ed White of HC Wainwright. Your line is now open.

Hey, guys. Thanks for taking our question. This is Steve on for Ed. First question, do you think the Salesforce is right size now or would you need additional investments? And if so, how should we think about SG&A for next year or this year?

Why don't we go first with Andrew on the Salesforce and then John can touch on the SG&A going this year.

Thanks, Steve. You know, we continue to make tweaks to our, I would say, our commercial footprint in the field. And one example is our new strategic expense team that we deployed in Q4 and into Q1. And we've been delighted with the progress they've made so far. We think our commercial footprint in terms of sales professionals right now is about right. I think as we move forward into market expansion and to new indications, we would reevaluate that. But I don't see it being like a real phase shift. I see it being an evolution of the team that we have.

And from an SG&A cost, Steve, from an SG&A cost perspective, I think you had asked about that. I mean, we continue to invest in commercial, as we always have. As I mentioned earlier, you know, we do continue to see efficiencies in optimizing that cost structure of the commercial front, but we continue to invest in it.

Okay, thanks. And then is there any update on SimSeer in China?

No. I mean, they obviously are continuing to sell COSELLA for the initial indication and small-cell there also, and they're also running their own studies. And they've been a wonderful partner to us to continue to be to that to this day. So, no updates beyond that. All right. Thank you.

I am showing no further questions at this time. I would now like to turn it back to Jack Bailey, Chief Executive Officer, for closing remarks.

Thank you, operator. As always, I look forward to keeping everyone updated on our progress going forward. Thank you for joining us today, and we'll be in touch. Thank you.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.